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Wage Garnishment in Kentucky

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In a Nutshell

A wage garnishment order allows creditors to take money directly from your paycheck. Most of the time, this is only possible after a court has entered a judgment. Here's how Kentucky regulates wage garnishments.

Written by Upsolve Team
Updated April 13, 2022

If you fall behind on your debts, a court may grant your creditors the right to garnish your wages. This means that a portion of your paycheck will be withheld — without your permission — until your debt is repaid. Kentucky and federal law limit the percentage of your disposable earnings that can be garnished at any time. But, as wage garnishment is best avoided — even when the amount garnished is limited—it’s a good idea to learn about how to guard against this process and how to stop it if a portion of your wages is already being seized. This guide will provide you with information about wage garnishment in Kentucky.

What Is Wage Garnishment?

If you lose in a fight against a creditor’s lawsuit, the judge assigned to your case canorder a judgment in favor of your creditor. If you fail to respond to a creditor’s lawsuit, your creditor may be granted adefault judgment. In either event, the judgment allows your creditor to take back the funds that you owe them. If your creditor enforces this judgment via wage garnishment, these funds will be recouped over time by taking a percentage of your paycheck. Wage garnishment is generally only allowed when a court order is in place. It’s limited by state and federal restrictions.

Who Can Garnish My Wages in Kentucky?

Any creditor, debt collector, or debt buyer with a valid judgment may garnish your wages. Creditors range from credit card companies to hospitals demanding repayment of medical bills. Under Kentucky law, creditors of accounts that are up to five, 10, or 15 years old may be entitled to pursue wage garnishment to fulfill a judgment, depending on the type of account in question.

Most creditors are required to abide by the same wage garnishment rules. But some creditors benefit from special rules that apply uniquely to them. If you owe student loans or federal taxes, you may be subject to different withholding rules than we discuss in this guide.

Additionally, Kentucky law approaches the collection of overdue child support with particular seriousness. Along with wages, parents may face garnishment of unemployment compensation, lottery winnings, veteran’s retirement benefits, insurance settlements, tax refunds, workers’ compensation, Social Security retirement or disability benefits, bank accounts, and retirement benefits for overdue child support obligations under Kentucky law. Up to 65% of an individual’s disposable earnings may be withheld for overdue child support. 

It’s important to understand that Kentucky law is unique. If a court in Indiana, Ohio, Michigan, or any other state has granted a creditor a judgment against you, that judgment may be subject to rules that are different than those imposed by Kentucky law.

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Kentucky Wage Garnishment Process 

Before a creditor can garnish your wages, they must file a lawsuit against you for non-payment of your debt. If you fail to respond to thesummons and complaint you’re served, your creditor will be issued a default judgment. If you attempt to defend your case and lose it, your creditor will receive a judgment. Both judgments and default judgments empower creditors to enforce their rights to collect the debts you owe. They may garnish your wages by serving your employer with a garnishment order or get a bank levy to seize money from your bank accounts.

You can object to a wage garnishment by filing a challenge to the garnishment order. If you want to object to a garnishment that’s already been ordered, you need to act quickly. Your objection may be successful if you’ve previously paid the amount owed, are current on a payment plan set up with the creditor, or the calculation of your balance owed is incorrect. You can get garnishment challenge forms (including the Affidavit to Challenge Garnishment) from theKentucky Courts.

How Much of My Paycheck Can Be Taken by Wage Garnishment?

The government limits the amount of your disposable earnings that can be garnished from each of your paychecks. Most creditors can’t take more than 25% of your disposable earnings or the amount by which your income that exceeds 30 times the federal minimum wage, whichever is less. Right now the federal minimum wage is $7.25, and 30 times that is $217.50.

For example, let’s say your weekly disposable earnings are $500. That means you take home $500 after all required deductions are removed from your paycheck. To see how much a creditor can garnish, we need to compare 25% of your disposable earnings to the federal minimum wage rule.

  • 25% of $500 is $125.

  • $500 minus $217.50 is $282.50. That’s how much your income exceeds 30 times the federal minimum wage.

Since $125 is lower than $282.50, creditors can only garnish $125 a week in this case. You can’t have more than this maximum withheld from your paycheck. That means usually only one creditor — taking that maximum — will ever be garnishing your wages at any given time. Garnishment will continue until your overall balance is paid or you take one of the two actions (outlined below) to stop the garnishment.

Additionally, garnishment orders arelimited by exemptions. Exemptions protect certain types of income from being garnished. For example, Social Security benefits, workers’ compensation benefits, retirement income, and unemployment benefits can’t be garnished by most creditors. Any alimony or child support payments that you receive will also generally be treated asexempt from garnishment, just as they would be if you filed for bankruptcy.

How To Stop a Garnishment in Kentucky

There are two primary ways to stop wage garnishment in Kentucky. First, you can pay off what you owe in installments or in a lump sum. If you’re paying your balance off in a lump sum, your creditor may accept less than the total you owe in adebt settlement arrangement. 

Alternatively, you can stop a wage garnishment by filing for bankruptcy. Both Chapter 7 bankruptcy and Chapter 13 bankruptcy filers benefit from a protection known as theautomatic stay. This goes into effect as soon as you file bankruptcy paperwork. The automatic stay prohibits creditors from engaging in most collection activities — including wage garnishment — for as long as a bankruptcy case remains open.

You can learn more about whether filing for bankruptcy might be right for you by scheduling a risk-free consultation with abankruptcy attorney in your area. If you opt to file a simple Chapter 7 case, you can potentially do so for free using the Upsolve filing tool. This free onlineresource is available to filers with simple cases.

Are There Any Resources for People Facing Wage Garnishment in Kentucky?

If you’d like to speak with someone about your wage garnishment situation, consider connecting with the team atKentucky Legal Aid.Legal aid societies provide free or low-cost assistance to members of lower-income households. Additional organizations that may be able to assist you include:

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